Randolph v. Hicks

CourtUnited States Bankruptcy Court, W.D. Kentucky
DecidedOctober 24, 2023
Docket23-03005
StatusUnknown

This text of Randolph v. Hicks (Randolph v. Hicks) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Randolph v. Hicks, (Ky. 2023).

Opinion

UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF KENTUCKY IN RE: ) ) ANTHONY BRADFORD HICKS ) CASE NO. 22-31254(1)(7) ) Debtor ) ) PAUL RANDOLPH, U.S. TRUSTEE ) ) Plaintiff ) AP NO. 23-03005 ) v. ) ) ANTHONY BRADFORD HICKS ) ) Defendant ) MEMORANDUM-OPINION This matter came before the Court for trial on September 20, 2023 on the Complaint filed by Paul A. Randolph, United States Trustee (“UST”) against the Defendant/Debtor Anthony Hicks (“Debtor”) seeking the denial of the Debtor’s discharge in his Chapter 7 case, pursuant to 11 U.S.C. § 727(c)(1) and Fed. R. Bankr. P. 7001. The Court considered the testimony of the witnesses, the Chapter 7 Trustee, Stephen Reisz, Bankruptcy Auditor, Gary Grimes and the Debtor Anthony Bradford Hicks. For the following reasons, the Court will enter Judgment in favor of the UST and against the Defendant denying his discharge in Chapter 7 Case No. 22-31254. FACTS On July 4, 2022, the Debtor, filed his Voluntary Petition under Chapter 7 of the United States Bankruptcy Code, which included Schedules A/B, C, D, E/F, I and J (the “Schedules”) and the Debtor’s Statement of Financial Affairs. The Debtor swore that the information contained in each

of the documents was true and correct under the penalty of perjury. Debtor resided at 3803 Ballard Woods Court, Smithfield, KY 40068-9330, at the time he filed his Petition and at the time of trial. The Debtor disclosed the following information in his Schedules that existed as of July 4, 2022: a. Schedule A/B Question 7, that he had no legal or equitable interest in any “electronics” such as “computers” or “electronic devices ....”

b. Schedule A/B Question 9, that he had no legal or equitable interest in any equipment for “sports and hobbies” such as any “... exercise, and other hobby equipment ....” c. Schedule A/B Question 17, that besides one checking account at Farmers Bank of Milton in the approximate amount of $2,000, he had no legal or equitable interest in any other accounts such as “checking, savings, or other financial accounts....” d. Schedule A/B Question 18, that he had no legal or equitable interest in any “bonds, mutual funds, or publicly traded stocks.” e. Schedule A/B Question 21, that he had no legal or equitable interest in any

“retirement or pension accounts.” f. Schedule A/B Question 35, that he had no legal or equitable interest in any other financial assets not already listed. 2 On July 5, 2023, attorney, William Stephen Reisz, was appointed the Chapter 7 Trustee in Debtor’s case. Debtor’s Chapter 7 First Meeting of Creditors occurred on August 16, 2022. On August 21, 2022, the Debtor with the advice of his attorney, Nick Thompson, filed

Amended Schedules A/B and C. The Debtor signed the amendment on August 4, 2022. The amendment disclosed that on July 4, 2022, the date the original Petition and Schedules were filed, Debtor also had an interest in (1) an Ameritrade Roth IRA, (2) an Ameritrade Traditional Roth IRA, and (3) a Robinhood Trading Account. Following the First Meeting of Creditors and the Debtor’s First Amendment to the Schedules, Trustee Reisz engaged the services of Edward Durnil, an auctioneer, to inspect the Debtor’s residence and surrounding property. The Trustee was attempting to determine whether there were

any issues with the Property, as well as the true value of the Property to determine if there was equity in the Property should he decide to sell it. Mr. Durnil called the Chapter 7 Trustee after his inspection and informed him that there was a large amount of “gym quality” exercise equipment located inside the house. Mr. Durnil provided a written report with pictures of the home and its contents including the exercise equipment. See, Joint Exhibit 5. Trustee Reisz then notified Debtor’s attorney that he needed to file an amendment to the Debtor’s Schedules to include the exercise equipment, along with the price paid for each piece of

equipment and its current value. On September 20, 2022, Debtor testified under oath at a Second Chapter 7 Meeting of Creditors. Debtor also filed a Second Amendment to the Schedules. The list contained 15 pieces 3 of gym equipment including the date the piece was purchased, the purchase price and the Debtor’s estimated current value of the equipment. The amendment stated that the equipment was jointly owned with his wife and that the Debtor claimed an exemption in 50% of the combined listed value of the equipment.

The exercise equipment was purchased on different dates between March 2020 and February 2022. The total purchase price of the equipment was $41,038.99. Debtor’s stated value of the equipment on the amendment to his Schedules was $5,160. The Trustee contacted Tim Hartledge with Hoist Fitness, and asked him to value the equipment for resale. Mr. Hartledge estimated he could resell the equipment for approximately $16,800. The Debtor’s home was listed on Debtor’s Schedules as valued at $600,000. The Trustee

determined there was equity in the house. Several months prior to the bankruptcy, Debtor had added a swimming pool and fire pit that cost approximately $145,000. Although there was equity in the house, the Trustee did not pursue a sale of the home or the equipment due to the wife’s interest in the home and their pending divorce. Trustee Reisz testified at trial that he asked the Debtor while he was under oath, whether he had listed all of his assets and whether there were any errors in his Schedules. The Debtor had replied, other than the two retirement accounts and the Robinhood account, that were later contained in the First Amendment to the Schedules, there were no other unlisted assets.

Gary Grimes, a bankruptcy auditor employed by the United States Trustee’s Office, also attended the Debtor’s First Meeting of Creditors and testified at trial. Mr. Grimes established that the Debtor had a history as a high wage earner including earnings of approximately $560,000 in 2020 4 and $460,000 in 2021. At that time, Debtor had been working as a mortgage broker for a bank. On Schedules I and J, Debtor listed his present income as $4,000 per month with a note indicating that at some point this amount would be reduced. The Schedules listed $700,000 of debt. On Schedule D, Debtor listed stock sales of $128,619 and losses of $73,798, yet no brokerage accounts were listed

on the Schedules. Grimes testified that all of these things raised red flags that needed further investigation. Grimes testified that after an Order was entered requiring the Debtor to turnover further tax returns and banking records, Grimes discovered there were transfers from Debtor’s PNC Bank account to Coinbase1, UBS, TD Ameritrade and Paypal accounts. Grimes requested Debtor’s attorney to turnover the documents related to these accounts. None of the accounts had been listed on Debtor’s Schedules, but Debtor’s attorney provided the documents to Grimes prior to the Meeting

of Creditors. Grimes asked Debtor at the First Meeting of Creditors why none of the cryptocurrency accounts were listed on his Schedules and Debtor responded that the accounts had no value on the date the Petition was filed. At the end of the First Meeting of Creditors, Debtor was asked by Grimes whether he had any other assets of value greater than $10.00 or more that were not listed and Debtor replied, “no.” Debtor’s attorney followed up Grimes’ questioning and asked if there were any other assets that he may have forgotten to list and Debtor replied, “no, other than the Roth IRA and the Robinhood account” he had previously disclosed.

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Randolph v. Hicks, Counsel Stack Legal Research, https://law.counselstack.com/opinion/randolph-v-hicks-kywb-2023.